Samsung Lee Kun-hee faces a fine of 100 million won for omitting some affiliates

Lee Jun-sung

승인 2019.04.22 12:15

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Samsung Electronics Chairman Lee Kun-hee

Samsung Electronics Chairman Lee Kun-hee was fined 100 million won for omitting some affiliates of Samsung Group and reporting false lists.

Judge Kim Tae-ho of the Seoul Central District Court on April 18 issued a summary order of 100 million won in fines for Lee, who was summarily indicted on charges of violating laws on antitrust regulations and fair trade. A summary order is a procedure in which fines are imposed without a trial. In March, the prosecution decided a summary indictment on the chairman in consideration of his health.

Lee was accused of omitting some of affiliates and falsely reporting the list in 2014 when he submitted data such as the status of affiliates to the Fair Trade Commission (FTC) to designate large business groups with limited cross-shareholding.
The findings showed that Samsung submitted false data, which omitted Samwoo and its 100 percent subsidiary Seoyoung Engineering even though they were affiliates of the group.

Samwoo is the No. 1 construction design company in the industry and has exclusively designed Samsung Electronics' semiconductor plant and Samsung's office building in Seocho-dong. Samsung C&T owns a 100 percent stake.

The FTC earlier filed a complaint with the prosecution against Lee in November last year, concluding that Samwoo was a disguised unit of Samsung Group. Prosecutors confirmed in March that Samsung C&T affiliated with Samsung Group exerted dominant influence in making decisions on the practical work of Samwoo and Seoyoung Engineering.

Under the Fair Trade Act, companies that "actually dominate business contents" are required to submit designated data to companies belonging to a business group. Lee's side denied the allegations during the FTC's investigation, but he reportedly admitted the allegations during the prosecution's investigation.

Lee has been hospitalized at Samsung Medical Center since 2014 when he suffered from an acute myocardial infarction.